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MINSHENG BANK (1988)

Principal Activities

The Bank and its subsidiaries (collectively the “Group”) mainly provide corporate and personal banking, treasury business, finance leasing, fund and asset management, investment banking and other financial services in the PRC.

Latest Results

The Group's profit attributable to shareholders for the 3 months ended 31-03-2019 amounted to RMB 15.79 billion, an increase of 5.7% compared with previous corresponding period. Basic earnings per share was RMB 0.36. No dividend was declared. Net interest income amounted to RMB 22.02 billion, an increase of 39.9% over the same period last year, loan impairment charges and other credit risk provisions increased by RMB 5.78 billion to RMB 14.36 billion. (Announcement Date: 29 Apr 2019)

Business Review - For the year ended December 31, 2018

During the Reporting Period, the Company took proactive measures in coping with the adjustments and changes in the internal and external operating environment. According to the strategic positioning of becoming “a bank for the NSOEs, a fintech-based bank and a bank of comprehensive services” and adhering to its customer-centric principle, the Company duly served the real economy and accelerated the implementation of reform and transformation. Significant results were achieved. The Company grasped market opportunities timely and continued to optimise its operational structure. The disposal of non-performing assets was enhanced, the assets quality remained stable and the profitability was improved steadily. A stable and healthy development was achieved in all business lines of the Company.

(I) Stable operation and profitability and continuous improvement of operating efficiency

During the Reporting Period, the Group recorded net profit attributable to equity shareholders of the Company of RMB50,327 million, representing an increase of RMB514 million, or 1.03%, as compared with the corresponding period of the previous year. Operating income amounted to RMB154,161 million, representing an increase of RMB12,214 million, or 8.60%, as compared with the corresponding period of the previous year. Net interest margin was 1.73%, representing an increase of 0.23 percentage points as compared with the corresponding period of the previous year. Return on weighted average equity and return on average assets were 12.94% and 0.85%, respectively, representing decreases of 1.09 percentage points and 0.01 percentage points as compared with the corresponding period of the previous year, respectively. Basic earnings per share was RMB1.14, increased by RMB0.01 as compared with the corresponding period of the previous year. Net asset per share attributable to ordinary share holders of the Company amounted to RMB9.37, increased by RMB0.94 as compared with the end of the previous year.

Cost reduction and operation efficiency enhancement of the Company were under solid progress and profitability was improved. Cost management has been further refined and ratio of necessary operating cost has decreased. Cost structure continued to optimise and operating efficiency has been further enhanced. During the Reporting Period, the cost-toincome ratio of the Group recorded at 30.58%, representing a decrease of 1.66 percentage points as compared with the corresponding period of the previous year.

(II) Coordinated growth of assets and liabilities and continuous optimisation of business structure

During the Reporting Period, the Group proactively adjusted the structure of its asset and liability business, and total assets of the Group increased moderately. As at the end of the Reporting Period, total assets of the Group amounted to RMB5,994,822 million, representing an increase of RMB92,736 million, or 1.57%, as compared with the end of the previous year. Among which, the total amount of loans was RMB3,056,746 million, representing an increase of RMB252,439 million, or 9.00%, as compared with the end of the previous year. Total liabilities amounted to RMB5,563,821 million, representing an increase of RMB51,547 million, or 0.94%, as compared with the end of the previous year. Of which, the total deposits amounted to RMB3,167,292 million, representing an increase of RMB200,981 million, or 6.78%, as compared with the end of the previous year.

For assets business, as at the end of the Reporting Period, total loans (including discounted bills) of the Group accounted for 50.99% of total assets, increased by 3.48 percentage points as compared with the end of the previous year. The total amount of loans to small and micro enterprises was RMB415,564 million, representing an increase of RMB42,302 million, or 11.33%, as compared with the end of the previous year. Among which, total lendings to small and micro enterprises with rating of grade 5 or above accounted for 86.25%, representing an increase of 4.92 percentage points as compared with the end of the previous year.

For liability business, as at the end of the Reporting Period, total deposits of the Group accounted for 56.93% of total liabilities, representing an increase of 3.12 percentage points as compared with the end of the previous year. Among which, retail deposits accounted for 18.16%, representing an increase of 1.57 percentage points as compared with the end of the previous year while total interbank liabilities (including interbank negotiable certificates of deposit (IBNCD)) accounted for 28.95%, representing a decrease of 2.95 percentage points as compared with the end of the previous year.

(III) Full implementation of reform and favourable development of major businesses

During the Reporting Period, the Company focused on major businesses and further advanced its reform and transformation. Key implementation measures were further clarified and supporting management system, coordination mechanism and organisation system were established to ensure a smooth implementation of the Company’s reform and transformation.

On one hand, the Company continued to expand its customer base and consolidated its business foundation. In respect of corporate customers, the Company adhered to its NSOE strategy and continued to improve the efficiency and quality of financing services to NSOEs. As at the end of the Reporting Period, the total number of strategic NSOE customers was 354, with daily average deposits of RMB193,263 million and total loans of RMB204,910 million, representing an increase of 8.92% and 12.09%, respectively, as compared with the end of the previous year. Supply chain finance has introduced the industrial solutions of “Express Series (通系列)” and the comprehensive financial services of the “E Series” had been completed. Ecological service system for supply chain customers groups has been initially formed. The number of core customers of supply chain finance increased by 121.43% as compared with the end of the previous year. The number of domestic corporate customers with deposit balance in the Company increased by 155.1 thousand, or 15.31%, to 1,167.9 thousand as compared with the end of the previous year. The number of domestic customers with general loans balance of the Company was 9,926. Customer base was further consolidated. In respect of retail customers, the Company focused on major customer groups, including small and micro enterprise customers and VIP customers, and implemented a segmented and differentiated management of different groups. The Company further deepened the comprehensive development of its retail customer base through wealth management. As at the end of the Reporting Period, VIP customers of retail banking business amounted to 2,933.0 thousand, representing an increase of 12.15% as compared with the end of the previous year. Private banking customers amounted to 19,250, representing an increase of 16.97% as compared with the end of the previous year. Financial assets of individual customers under management amounted to RMB1,650,120 million, representing an increase of RMB213,760 million as compared with the end of the previous year. Operating income of retail business amounted to RMB56,357 million, representing an increase of 17.02% as compared with the corresponding period of the previous year.

On the other hand, the Company continued to optimise its products and services and improved its integrated operating capability. For financial markets business, the Company proactively adapted to the trend of product standardisation, accelerated the transformation of its products and business model, and continued to enhance its capabilities in investment transactions and asset management. As at the end of the Reporting Period, the scale of total assets under custody of the Company (including various types of funds under regulation) was RMB8,714,750 million, representing an increase of 12.60% as compared with the end of the previous year. Total amount of pensions under the custody of the Company was RMB243,990 million, increased by RMB158,956 million, or 186.93%, as compared with the end of the previous year. The existing scale of wealth management products amounted to RMB1,440,555 million. The transaction amount of agency and proprietary trading of precious metal and foreign exchanges remained among top of the market. In respect of internet finance business, the Company proactively explored new development models of internet finance and continued to innovate products and services of direct bank, retail internet finance, corporate internet finance and online payment. The Company continued to rank among top in the banking industry in terms of transaction frequencies of customers. As at the end of the Reporting Period, the number of direct bank customers of the Company reached 19,171.3 thousand with financial assets of RMB132,291 million under the Company’s management. As at the end of the Reporting Period, total number of corporate online banking customers was 1,161.8 thousand with total amount of RMB57.24 trillion in 99,097.3 thousand transactions during the Reporting Period. Total amount of Kua Hang Tong (跨行通) transactions was RMB230,560 million, and the total amount of online payments was RMB6.20 trillion. In respect of integrated operation, relying on its overseas business platforms, the Company continued to expand its overseas business market, strengthen cross-selling and business coordination as well as improve cross-border financial services. International competitiveness and influence of the Company have been further strengthened. During the Reporting Period, net profit of the Hong Kong Branch of the Company amounted to HKD1,456 million, representing an increase of 37.88% as compared with the corresponding period of the previous year. Net profit of CMBC International amounted to HKD372 million, representing an increase of 65.33% as compared with the corresponding period of the previous year.

(IV) Enhanced risk management and basically stable asset quality

During the Reporting Period, the Group continued to improve its mechanisms in relation to regular and differentiated customer risk monitoring, evaluation and classification, so as to further refine its targeted post-loan management for existing loans and duly strengthen risk prevention in key areas. In addition, the Company continuously enhanced its disposal of NPLs to maintain stable asset quality. Total allowances used for writing off and transferring non-performing assets recorded RMB58,421 million.

As at the end of the Reporting Period, total outstanding balance of NPLs of the Group amounted to RMB53,866 million, increased by RMB5,977 million, or 12.48%, as compared with the end of the previous year. The NPL ratio was 1.76%, representing an increase of 0.05 percentage points as compared with the end of the previous year. The allowance to NPLs was 134.05% and 2.36%, respectively, representing a decrease of 21.56 percentage points and 0.30 percentage points, respectively, as compared with the end of the previous year. The allowance to NPLs and allowance to total loans were in compliance with the Notice on the Regulatory Requirement on Adjustment to Allowance for Impairment Losses on Loans of Commercial Banks (《關於調整商業行貸款損失準 備監管要求的通知》) (Yin Jian Fa [2018] No.7) issued by the CBIRC.

Business Outlook - For the year ended December 31, 2018

To cope with changes in external conditions and internal development demands, the Company has formulated the Overall Implementation Scheme for Reform and Transformation and the Three-year Development Plan of China Minsheng Bank (《中 國民生銀行改革轉型暨三年發展規劃整體實施方案》) in order to accelerate the implementation of its reform and transformation. In the coming three years, the Company will be committed to becoming a benchmark bank with distinctive features, increased value and continuous innovation. The Company will also strategically position itself as a bank for NSOEs, a fintech-based bank and a bank of comprehensive services. 2019 is a critical year for the effective implementation of reform and transformation as well as the three-year development plan.

A bank for NSOEs. With its focus on NSOEs and the people, the Company will focus on large-and medium-size high-quality NSOEs core enterprises along the upstream and downstream of the supply chain and small and micro enterprises, and serve as a financial butler of NSOE customers and their senior management with integrated, customised and comprehensive financial services. It will strive to become the host bank and preferred bank of the NSOE customers.

A fintech-based bank. The Company will vigorously develop direct bank, small business online credit and credit card online customer acquisition to strengthen technology finance and secure its leading position in the industry. It will also enhance its scientific and technological capacity so that technology can empower business. The Company will improve its intelligent level in finance service to build China’s internet bank with the best customer experience.

A bank of comprehensive services. The Company will expedite its business layout diversification to cover fields including trust, leasing, fund and asset management and achieve integrated and comprehensive services of the Group. The Company also aims to establish a cross-selling and business coordination system under “One Minsheng” strategy to provide its customers with comprehensive financial services with the integration of commercial, investment and transaction banking and the combination of capital, intelligence and commerce. The Company will prioritise its customers and provide integrated and comprehensive services through the cooperation of front, middle and back offices.

In the implementation of the new three-year plan and the promotion of reform and transformation, the Company will stick to the overall operation strategy of “light-capital, optimised liabilities, adjusted structure, promoted coordination and secured quality” and deploy its three major innovative businesses, three principal businesses and five major business segments based on the core principles of high quality development and efficiency. Its deployment includes strengthening the three primary businesses, namely direct bank, small business finance and investment banking; consolidating the three leading businesses, namely credit card, supply chain finance and asset management; and enhancing the five major business segments, namely corporate finance, retail finance, financial markets, internet finance and comprehensive operation. On the basis of the above deployment, the Company will transform itself into a benchmark bank of the industry principally engaging in a digitalised, light-capital and comprehensive business in addition to traditional business. In addition, greater reform and innovation efforts will be made. With innovative mechanisms and systems of its major management aspects, the Company will be able to revitalise its structure. It will also establish a customer-centric operation and management system and extensively enhance its professional management to facilitate and support the implementation of its business development strategies.

Looking forward, focusing on the three major tasks, namely serving the real economy, preventing and mitigating financial risks and promoting financial reform, the Company will thoroughly study the economic and financial development and market changes, maintain its prudent operation and promote reform and transformation. Through stabilising growth, restructuring business, preventing risks, promoting coordination, optimising mechanism and consolidating foundation, the Company aims to promote its high-quality growth and strengthen its capability to serve real economy.

Source: Minsheng Bank (01988) Annual Results Announcement

Business Nature

We are the first and largest national joint stock commercial bank in the PRC primarily founded by non-state-owned enterprises.

Prospect

Chairman
HONG Qi
Contact Info
Company Address:
3207-08, Bank of America Tower,12 Harcourt Road,Central Hong Kong
Web: www.cmbc.com.cn
Quote
HSI: 28,185.98 -327.02
5.36
0.067 (1.2%)
As of16:15 25 Jun 2019
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Volume: 32.02M
Mkt Cap: 45.15B
Turnover: 172.37M NAV: 10.667
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Contact MINSHENG BANK
Company Address:
3207-08, Bank of America Tower,12 Harcourt Road,Central Hong Kong
Web: www.cmbc.com.cn

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